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Post by walfred on Aug 15, 2012 0:50:47 GMT -5
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Post by Cujo on Aug 15, 2012 5:53:16 GMT -5
China's actions are usually well calculated & thought out. This could be interesting to watch.
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Post by Michael Downing on Aug 15, 2012 6:30:50 GMT -5
Could also be a sign that the Chinese have troubles of their own and the government is closing ranks and trying to be ready for the coming storm internally as well as externally. One of China's biggest problems is all the money they are sitting on in US dollars and Euro's. They are stuck between a rock and a hard place. If the European Union goes under and the US economy hits bottom then this large cash reserve will lose most of its value. But if they begin to dump it on the open market then these currencies will begin to rapidly devalue and they lose much of its value. They are on an unsustainable path unless they can bring about a major correction due to their own massive stimulus program... seekingalpha.com/article/805411-lessons-to-learn-from-china-s-failed-stimulus-program
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Post by safetalker on Aug 15, 2012 8:13:24 GMT -5
There is also the problem that to trade on the NYSE requires you to trade in and accept U.S. Dollars (FRN) which the Chinese do not. Then again as our economy drops their own Stock and Commodities exchanges are booming. I even saw a store in Pinehurst last week advertising that the accepted "Chinese Pearl" Credit cards. That sucking sound you hear is the sound of jobs and money going overseas? (Remember him?)
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Post by busboy on Aug 15, 2012 9:05:49 GMT -5
One of the interesting aspect of China holding so much US dollar reserves, is that they have to "spend" them to get the benefit from them. Once they do this, it has a stimulus effect upon the US economy, because these newly spent/circulated dollars have to eventually come back to the US.
I think the situation in China is rather grim. Their economy is slowing rapidly, their currency value, compared to others, is becoming more and more lopsided. They try to artificially force it at a lesser value, to spur exports, but with other currencies dropping, especially the Euro, they can't keep up.
It seems this move to pull out of the NYSE is simply a move to further isolate the Chinese economy from the effects of world free trade. It is tough to manipulate markets in a closed society if you are trading in a free and open market. Look at what happened to Soviet Russia. They had a closed economy, but when it was forced open, they collapsed. China is headed that way.
Also, considering that NO ONE can be trusted to be honest with their fiat currencies, countries are wise to try to avoid being at the mercy of fair dealings from other countries. The Euro is a farce, soon to disband and collapse. The US dollar is being manipulated as best they can do it, and is also in a significant decline. Few other currencies are "trust worthy", and those which might be, are not well circulated enough to provide an economy the size of China's a hiding place for their foreign reserves.
Tell ya who is doing well right now. Russia. Their oil revenues are up, and they are mining gold to the tune of @180 tons a year. They are the 5th largest producer of gold, and that "wealth" is getting stashed into their central bank.
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